Partner Performance

The role it plays in motivating and retaining talent.

What role do individual partners
play in the retention and
motivation of a firm’s talent? The
answer – a significant one. Talent in the broad
sense is defined as everyone who is employed by
the firm.

Highly motivated administrative managers who remain with a firm over time can accomplish a great deal – they execute. But, when these managers leave, projects are put on hold and staff is left without leadership, structure and effective management.

Highly motivated support staff who remain with a firm for longer periods of time also contribute daily to the service of the firm’s clients and the success of the firm’s professionals.

by Karen MacKay, MBA, CHIC
President

You have only to look
to the attorney who is between assistants to
understand the frustration and stress caused by
high staff turnover rates.

Highly motivated
associate lawyers who stay long enough add to
both the top and bottom line, increase partner
productivity and contribute significantly to the
building and retention of client relationships.
The select few who make partner add to the
financial stability of the firm and its legacy.

When high turnover rates occur within associate
ranks, marked decreases in associate productivity
become evident because both departed associates
and those currently with the firm are distracted.
Partner productivity increases by default, profits
remain flat - or worse, go into decline. In all
cases, the recruiting costs negatively impact
profit margin.

Much has been written on law firm culture. In
short, culture can be determined by three main
elements: what gets done; what gets focused on
and what gets rewarded. Values determine
behavior. Collective behavior determines
culture. In professional services firms, culture is
in part defined by the partnership compensation
plan – what gets rewarded gets valued and gets done. If hiring the right people, motivating them to success, rewarding achievement and retaining the firm’s talent is important in your firm, partners can and should be rewarded for their contribution to motivation and retention.

In turn, practice group leaders can and should be rewarded for development, motivation and retention within their group. If the highest paid practice group leader also has the highest turnover rate, then clearly, there is something wrong with the manner in which success is measured. If your firm claims to value
professional development, but partners do not manage to find time to participate, then in all likelihood, associates and staff will be disinclined to participate. The result - the firm’s
investment is diminished.

As firms continue to move toward hiring more
sophisticated administrative and professional
talent management, three things typically occur.
First, partners can fight against giving up
responsibility and authority. Second, partners
can abdicate their responsibilities to these
administrative managers in order to concentrate
their time on billable activities. Finally, and
most favorably, partners and administrative
management can work in concert to provide solid
leadership and management to achieve more
effective results.

The relationship between partners and managers
and the impact the relationship has on staff can
be compared to that of a family relationship.
When Mom and Dad present a collaborative,
combined front to their children – the children
are happy and the family tends to function
successfully. Law firms are not much different
in this regard. The family analogy is quite fitting
since the dynamic in law firms – certainly in
every firm with which I have worked, described
itself as a family. When managers are not given
the authority to deal with day to day issues, the
result is a “wait until your father gets home”
scenario where the managers, through no fault of
their own, lose credibility when that authority is
questioned. When managers make decisions that
are second guessed or vetoed by partners, those
managers have little incentive to step up their
responsibility level. They eventually fail to
develop the confidence and authority needed to
reach their full potential. Motivating? Not
likely! Even if partners believe that their
managers made errors during their decision
making process, the managers must be supported
and backed up by the partnership. If, over time,
the partnership decides the manager is
incompetent – that issue should be dealt with
appropriately. In the meantime, trust their
judgment, support their decision making skills
and allow them the time to prove themselves
capable.

In recent years, there has been an evolution in
law firms towards professional management of
the legal resources (attorneys and occasionally
paralegals) through non-practicing attorneys
and/or highly skilled human resource
professionals to support recruitment,
management and development of the
professional staff. This investment goes beyond
the employment experience with the firm and at
best, through to alumni relations. The more
successful firms work together with talented
management to improve motivation, accelerate
associate development and improve retention. A
good experience turns departing lawyers into
alumni rather than a complete loss to the firm
when associates walk out the door.

How important is talent? Tom Peters said in his
recent book entitled “Re-Imagine”, that
“effective branding is more internal than
external”.

Talent is people

Talent is brand

Brand is talent

“Talent is everything” (Peters)

Essentially, law firms compete for talent and
clients. Each is intrinsically connected to the
other. When your talent is happy, challenged
and rewarded – you have something to brand.

So, the question remains - how do you get
partners engaged? First, you must help them
understand at a visceral level that talent really is
everything.

In a recent study of 80 US law firms that had
dissolved over a six year period between 1998
and 2004, more than half claimed an inability to
recruit and a resulting inability to provide service
to the existing client base as a significant factor
in the firms’ failure. In virtually all of the
dissolved firms, lateral departures (otherwise
know as a firms’ inability to retain key talent –
partners and associates) played a key role in the
demise of these firms.
Again, how do you get partners engaged? Help
them to understand at a personal level that talent
directly impacts their wallets.

Healthy turnover, particularly in the associate
ranks, is considered to be approximately 16%.
You may want to review the average
productivity numbers for your firm for associates
and partners. When associate turnover escalates
beyond a healthy percentage, associate
productivity decreases – guaranteed. When
associate productivity decreases, partner
productivity increases – guaranteed. Partner
hours increase for a number of reasons. Partners
will hoard the work rather than delegate when
associate turnover is high. When a partner has
invested in the development of an associate only
to have the individual leave, the partner may not
want to repeat the process with yet another new
associate for fear of reoccurrence. This results in
a resistance to training and mentoring.
Accordingly, partners are forced to work harder
to provide service to existing clients. It means
non-billable time is reduced which directly
impacts the activities that, in turn, impact the
future – business development and professional
development. Is the future of the firm at risk?
Guaranteed.

In a firm where associate turnover increased
from 16% to 30% in one year, partner
productivity increased to compensate for lower
associate hours. All partners had to work harder
simply to maintain status quo. Working harder
and spending more time at the office also meant
spending less time at home. Consequently, net
income per partner would be reduced. Have fun
explaining that to your banker, or worse, to your
spouse.

Healthy turnover benefits a firm at all levels.
Healthy turnover means that the firm is
monitoring performance and acting appropriately
when employees are not measuring up to the
firm’s standards. It also means that the firm is
making business decisions, setting goals and
identifying roles that will help the firm meet
those goals. Healthy turnover brings new ideas
to a firm and keeps employees energized. Little
or no turnover allows a team to become stale and
inhibits the growth of new ideas. Little or no
turnover also means the firm is creating roles
around existing people, rather than creating a
role to meet the firm’s goals and sourcing the
right people to meet the firm’s needs.

Let’s look again at brand. GE has been known
for years as an incubator of leadership talent.
GE and other large corporations measure the
capability of their leadership development by
monitoring attrition from their management
ranks and, specifically, where their people are
going. A law firm with a superb associate
training and development program can and
should measure associate attrition. Where are
your alumni going? When general counsel is
sourcing talent from your firm, it may be a
measure of the good job that partners are doing
in developing associate talent. Equally, it may
be a measure of the respect your firm has earned
in the business community. Can this be
branded? Absolutely!

What can partners can do to motivate and
retain top talent?

Here is a top ten list:

Set clear standards of performance and
behavior at all levels.

Invest in professional development at
all levels. It is not necessary to
guarantee to keep all your people
employed. What you can guarantee is
that you will keep them employable by
continuously building skill sets.

Invest in activities where
administrative management can
network with other professionals in
their discipline which will assist in
generating new ideas for the firm. This
includes association memberships,
local networking activities and
attendance at national conferences.

Respect your people and their
contributions.

Compensate at market rates.

Communicate both good and bad news.
Ensure that you are timely and honest.

If your managers are doing a good job,
support them and get out of their way.
If they are not performing well, help
them find success elsewhere.

Assess your needs. Define the roles
needed to meet those needs and recruit
to fill them both internally and
externally. Find the best person for the
job. Do not create roles for employees
simply to keep them in the firm. You
may be holding them back from future
opportunities for success.

Reward achievement. Reward the
value that your people bring to the
firm.

Reward common sense.

Finally and perhaps, most importantly to the success of your firm, understand your culture – what is valued, what gets focused upon and what gets rewarded. Be consistent and “walk the talk”